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Is Congress setting the stage for another mortgage crisis?

Owning a home. It's been called the American Dream. But as the financial crisis taught us, it's a dream not every American should make a reality. Now, some critics believe recent changes announced could be setting up another crisis.

The Federal Housing Finance Agency Director Mel Watt this week announced - from a Las Vegas casino - that he was bringing back some of the low down payment, lax lending standards that were all too prevalent during the housing boom that eventually created the housing bust and the financial crisis.

Yahoo Finance Editor-in-Chief Aaron Task spoke with former "Car Czar" Steve Rattner, who oversaw the restructuring of the automobile industry, about the implications of this latest return to easy lending, and whether the move is setting up another financial crisis for the United States.

“Nobody wants to take on the tough questions of: ‘How much housing do we want to have in this country? How many people should be homeowners versus renters?’” Says Steven Rattner, Chairman of Willett Advisors.

With regulators loosening some lending rules in an attempt give a boost to the slow-to-recover housing market, there may soon be a new crop of Americans putting out the welcome mat on a new home. New regulations would make it easier for Americans to buy a house with little or no down payment. It’s a departure from the push after the financial crisis to tighten lending standards.

Rattner, who has also served as Counselor to the Secretary of the Treasury, remembers where the every-American-should-own-a-home push got us last time. “[The U.S.] went through this period - which both parties signed on for - that it was the American Dream to own your house, and then we ended up in 2007 and 2008.”

So will these new rules bring us back to the dangerous situation that led up to the financial crisis? Rattner says, “I do worry that we [could] go too far the other way, although, certainly, people remember well enough that I don’t think you’re going to see that kind of irresponsible lending in the short term, but we have to make sure we strike a balance."

As for the future of Fannie Mae (FNMA) and Freddie Mac (FMCC), Rattner believes Fannie Mae and Freddie Mac should be government entities that provide some kind of liquidity backstop so that in periods where the private sector isn’t there, for a fee, Fannie and Freddie could "provide some liquidity to the mortgage market, but... not 90 or 80% of the mortgage market the way they are today."

Fannie Mae and Freddie Mac have been tied in various legal battles involving the companies' policies leading up to the housing crisis, as well as cases involving the companies' overseer and the Treasury Department, in which shareholders argue the deal with the government unfairly wiped out shareholder profits.

Rattner says, “I think what we need to do is reorganize them, get rid of this public-private partnership idea that’s embedded in Fannie and Freddie. There should never have been private shareholders.

“That’s part of why they went so far off the rails. That was a terrible mistake."

Rattner believes reorganization is what is required, but that would take action from Congress, and Rattner points that, so far, Congress hasn't been willing to take that on. Instead, Rattner says, "Congress is doing nothing."

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